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The right side of companys SFP is comprised exclusively of the following: 20% short-term debt (bank loans) on which it pays 8.5% interest; 20% long-term
The right side of companys SFP is comprised exclusively of the following: 20% short-term debt (bank loans) on which it pays 8.5% interest; 20% long-term debtbonds that currently have a YTM in the market of 6.1%; and 60% shareholder capital, the cost of which is estimated at 7.7%. Determine the companys discount rate by calculating its weighted cost of capital.
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